Consumers face higher food costs and reduced availability of goods unless the UK strikes a comprehensive, zero-tariff trade deal with the EU, according to the British Retail Consortium (BRC).
In a report released ahead of the launch of negotiations next month for a new trade agreement since the UK left the EU at the end of January, the BRC outlines its recommendations that will reduce the impact on consumers and retailers.
While the report makes clear that there is ‘no possibility of return to frictionless trade’ under the government’s red lines, the BRC said its roadmap calls for pragmatic solutions on future compliance and regulatory checks that will apply from January 2021.
“The EU is much more significant to our supply of food products than to non-food products. Over three-quarters of our food imports come from the EU. These are products with a short shelf life and the transit is much quicker than with products such as electricals and clothing, which often comes from outside the EU,” it said.
Its recommendations include a zero tariff trade deal; cooperation with the EU to minimise trade friction; coordination on VAT, customs and excise procedures; advance information on new checks and paperwork and timely construction of necessary infrastructure at UK ports.
Without these, it warned that consumers would face higher costs and reduced availability of goods.
Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said: “The issue is simple – higher tariffs and extensive checks will harm consumers, retailers, and the UK economy. The Government must set about to negotiate a zero tariff agreement that minimises checks and red tape otherwise it will be consumers who suffer as a result.
“The introduction of excessive or avoidable checks would mean businesses face a mountain of paperwork to be filled out by an army of newly trained staff, coupled with exhaustive checks on thousands of lorries every day. And the result for consumers would be higher costs and reduced availability on the shelves.
“Meanwhile, new IT systems will need to be created and tested before the 1st January 2021. Border Control Posts must be built, with people hired and trained to run. Unless these are ready and tested. The Government has no time to lose.”
UK Government and the EU should aim to secure:
• Zero tariff deal to keep costs low for consumers and to help the new NI trade arrangements work.
• Coordination to minimise friction, costs and delays from new border checks or regulatory or customs controls.
• Regulatory and enforcement arrangements in key areas (agri-food, industrial, electrical products, chemicals, pharmaceuticals) to secure market access with as low friction as possible.
• Close relationship with EU VAT and excise procedures to keep prices and red tape down.
• Deal which ensures common transit procedures, haulage and drivers to allow goods to move without queues, long delays or stops.
• Deal that works (with UK unilateral mitigations) to ensure smooth flow of goods between NI and rest of the UK.
• UK ports have the capacity to handle increased checks.
• Retailers and their suppliers have sufficient time to test new systems.
Key concerns for food businesses going into 2020
Meanwhile, border/customs issues are among the key concerns for food businesses going into 2020 as identified by the UK’s Food and Drink Federation.
Its 2019 Business Confidence report highlighted the cost of ingredients and inconsistent policies on plastic reduction as other anxieties among businesses.
The report also noted that over 60% of businesses see increased domestic demand as an opportunity for their business this year, with over 40% looking forward to increased certainty over the UK's future EU relationship.
FDF Chief Executive Ian Wright said: “It's no surprise that the industry remains troubled following a period of sustained uncertainty, with our future relationship with the EU still unresolved. But our industry is phenomenally resilient.”